Why is Real Estate as an Investment Class Often Overlooked?
It’s no surprise that, along with the best chance at returns, investors want as little risk as possible. The common investment strategy is to hand the keys to a trained professional, hoping that through shrewd maneuvering and market knowledge, their hard-earned money can grow.
Still, too many portfolios are overlooking the addition of real estate or mortgages, both of which drive one of Canada’s most predictable and healthiest markets.
Why are North Americans Under Exposed to this Opportunity?
There’s a large segment of investors who might not view real estate as an investment class in the same positive light as they view stocks and bonds. Not to mention, there’s several markets and industries—tech, energy, online—that typically hog the headlines.
This might boil down to investors needing to be educated on the value of investing in real estate and real estate products.
Breaking Down the Opportunity
Regardless of the opportunity, every investment class is equipped with pros and cons. All an investor can do is look at data and history to predict future performance. It’s not an exact science but it doesn’t have to be a guessing game either.
Looking at Toronto, its robust job market will continue to drive its strong housing market. At the very least, job opportunities across sectors help stave off any decline.
There’s a Large Amount of Upside
Residential properties in the GTA offer an alternative investment class that has yielded results for many savvy investors.
Most experts believe that the strongest portfolios are comprised of a diverse mix of investments. Adding real estate can not only protect a portfolio through greater diversification but it can provide more attractive returns than traditional stocks and bonds.
While real estate is never going to be a risk-free endeavour, it has a lot to offer. Long-term growth and some tax benefits on top of the historically strong performance of the GTA housing market should make it a welcome addition for investors.